Legal Opinion: Love is... signing on the dotted line before marriage
Family lawyers are advising on more pre-nuptial contracts than ever before. Robert Verkaik, Law Editor, shows how couples can take early action to avoid a messy divorce
Wednesday 13 February 2008
Tomorrow is the one day of the year when the head is given over to matters of the heart. But the thousands of couples who pledge their troth on St Valentine's Day may find it would pay to spend a little time proposing the idea of a pre-nuptial agreement too.
Imported from the United States, the so-called "love contract" has recently gained ground in the public consciousness and the family law courts. Although it is not legally binding, the Court of Appeal, in a case last December, showed that if both parties had given their free consent to the terms of a contract, then the court would try to honour it.
The decision came in a multi-million-pound divorce battle between a 62-year-old property tycoon, Stuart Crossley, and his wife Susan, who signed a detailed pre-nuptial contract just weeks before their January 2006 wedding. Mrs Crossley, a three-time divorcee who separated from her husband 14 months later, has questioned whether that agreement was binding, on the grounds that Mr Crossley had failed to disclose all his financial assets.
Lord Justice Thorpe, Deputy Head of Family Justice, emphasised the growing importance of pre-nuptial agreements in backing a decision designed to speed up resolution of the case. The court ruled that both individuals were "mature adults" who had brought sizeable personal fortunes to the marriage; Mr Crossley has disclosed assets totalling around £45m, while his wife is estimated to be worth £18m.
Mrs Crossley claimed that Mr Crossley, represented by the leading family law lawyer Mark Harper, of Withers, failed to disclose the full extent of his wealth before she signed their pre-nuptial agreement, and might be hiding tens of millions of pounds in offshore accounts in places such as Monaco and Andorra.
Her lawyers argued that requiring her claims to be aired in a single day, as authorised by the court, would in effect elevate their pre-nuptial agreement to a "knock-out blow", blocking her from presenting oral evidence or a fresh valuation of Mr Crossley's assets. Lord Justice Thorpe disagreed, arguing that the pre-marital agreement went to the very heart of any settlement. Mrs Crossley is understood to have now abandoned her claim against her husband, leaving the contract intact.
The barrister Joanna Goodall, a matrimonial law expert at Mills & Reeve, says the case could have important ramifications for pre-nuptial contracts in all marriages, not just ones where both spouses are independently wealthy. But she added: "In a case where both parties have significant wealth which was disclosed at the time the agreement was entered into, it seems unlikely that any such non-disclosure, even if proved, will necessarily render the agreement null and void."
The Court of Appeal approved the approach adopted by the judge at first instance to require the wife to set out her arguments as to why the pre-marital agreement is of little or no significance in the exercise of judicial discretion at an early stage.
The Crossley case builds on a High Court ruling three years ago in which a former model lost a £1.6m claim for compensation against her wealthy husband. Setting out new tests for agreements between the super-rich, the judge upheld a contract signed the day before the couple's wedding limiting the wife's claim to £120,000.
The court heard that Mr and Mrs K, from west London, married shortly after Mrs K, 28, became pregnant. Mr K, a chartered surveyor with assets estimated to be worth £100m, only agreed to the marriage after the father of the bride put pressure on him not to have a child out of wedlock.
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